Japan's trade deficit widened in September as exports plunged 10.3% from a year earlier, weighed down by Europe's debt crisis and a surge in antagonisms with China that have damaged close economic ties.

The deficit for the month was 558.6bn yen (£4.5bn), the finance ministry said on Monday, higher than the forecasts of many analysts and bigger than a deficit of about £2.3bn a year earlier. The deficit in August was £6bn.

The world's third-largest economy was "levelling off", the central bank governor, Masaaki Shirakawa, told a quarterly meeting of the bank's regional managers. He warned that the risk of shocks to the financial system from the debt crisis in Europe remained high and slowing global growth was hitting manufacturing and exports.

With the risk of recession rising, the Bank of Japan needs to convince markets that it will do anything necessary to pull the economy out of its two-decade-old malaise, said Matthew Circosta, an economist with Moody's Analytics in Sydney, Australia.

Instead of sporadic monetary easing, "they need to make it sustained and powerful", he said. "They've just got to be more aggressive than they are now."

Many expect the central bank to opt for further easing soon, perhaps as early as the next board meeting on 30 October.

September's exports totalled 5.4 trillion yen (£43bn). Imports rose 4% from a year earlier to 5.9tn yen, inflated by additional imports of oil and other fuels for power generation as most nuclear reactors remain offline after last year's Fukushima nuclear disaster.

So far, Japan's trade deficit for 2012, according to the ministry's provisional figures, is about 4.73tn yen.

The ministry figures show exports to all regions falling, apart from a meagre 0.4% year-on-year gain in shipments to North America. Exports to crisis-stricken Europe plummeted 26%.

A territorial dispute with China that sparked anti-Japanese riots in September took a heavy toll, with exports to China sinking 14% from a year earlier to 953.4bn yen. Imports from China climbed 3.8% to 1.28tn yen.

The rise in antagonisms over disputed islands in the East China Sea has been especially hard on the car industry. Exports fell 15% in September from the year before.

The strong Japanese yen has hurt the country's export competitiveness, while demand has evaporated as growth slowed in most regions. Exports of consumer electronics, a mainstay, fell by double-digit figures from a year earlier.

Resource-scarce Japan is almost entirely dependent on imported fuel, and it has long relied on robust exports of high-value consumer goods and industrial products, such as machine tools, to help counter the cost of importing its energy needs.

With most of the country's nuclear plants shut down, manufacturers and utilities have increased their reliance on traditional energy sources, such as oil and gas, while stepping up conservation and investments in renewable energy.

Boosted partly by higher prices, imports of fuels jumped 18% in September from a year earlier to 2.15tn yen, accounting for more than a third of Japan's total imports.